Martin Caceres has rejected the offer of a contract from AC Milan.
The Uruguay international has been without a club since leaving Juventus at the end of last season and has not made a competitive appearance for more than a year.
But despite passing a medical in Milan this week, Caceres has elected to look elsewhere after failing to agree personal terms.
"Caceres thought about the offer. We proposed a deal he considered to be insufficient. He passed all of the medicals, but we could not agree personal terms," CEO Adriano Galliani told Mediaset Premium.
"I wish him all the best in finding another club.
"I thought he could be useful for us, because he can play every role in defence. He has played in the centre and on the right for Juve and on the left for Uruguay.
"We'll wait for Luca Antonelli and Mattia De Sciglio to recover from their injuries. The transfer market is closed."
Milan brought in Gerard Deulofeu and Lucas Ocampos on loan during the transfer window, but Galliani concedes recruitment has proven to be a difficult job.
"I am forced to only sign players on loan or at zero cost, those are the limitations set on me," he added. "Anyone is capable of signing a top player, but you need certain funds.
"I tried to identify those players who were very good, but did not fulfil their early potential. Ocampos was considered the best Under-18 in the world when Monaco signed him and Deulofeu at Barcelona was the brightest talent from their academy.
"Anyone who had that potential can still fulfil it. In the past we used to buy the best in the world, but things have changed."